SB 7 signed: Securing Texas’ water future

Key Takeaways:

  • On Wednesday, Gov. Greg Abbott signed Senate Bill 7 into law, marking a historic advancement in state water policy.
  • SB 7 and House Joint Resolution 7 deliver on the Governor’s call for a “Texas-sized” investment in water infrastructure.
  • This new legislation will catalyze a new era of water infrastructure development in Texas.

On Wednesday, Gov. Greg Abbott signed Senate Bill 7, a historic measure inaugurating a new era of water infrastructure development in Texas. State Sen. Charles Perry, R-Lubbock, and state Rep. Cody Harris, R-Palestine, SB 7’s author and sponsor, joined Abbott for the signing ceremony in Lubbock. Pending voters’ approval of a ballot proposition in November, the legislation initiates a bold, new financial strategy for state water infrastructure development.

Water Infrastructure Challenges

Texas faces two long-term water infrastructure challenges. The first involves the need to expand and diversify the water supply portfolio needed for a drought-prone and growing state. Two reports released last year by Texas 2036 revealed that insufficient water supplies during an extended drought could inflict $165 billion in economic losses per year as soon as 2050, and even threaten the reliability of the state’s electric grid. Absent reliable water supplies during dry times, Texas’ economy will suffer.

The second challenge involves fixing aging, deteriorating drinking water and wastewater systems. Left unaddressed, these failing systems could incur nearly $320 billion in economic damages over the next 15 years.

Texas will need to invest at least $154 billion over the next 50 years toward addressing its water infrastructure challenges. While existing state and federal water funding programs will cover a portion of this amount, Texas 2036 projects a long-term water infrastructure funding gap of just over $110 billion.

A “Texas-Sized” Investment, Delivered

Recognizing the importance of reliable water infrastructure to the state’s future, Gov. Abbott called for a historic, “Texas-sized” investment in water infrastructure in his State of the State Address in February.

The Legislature delivered — in spades — by passing a landmark package of bills including SB 7, HJR 7, and House Bill 500. Combined, these bills amount to the largest state water infrastructure investment in Texas history.

SB 7 works in conjunction with HJR 7 to dedicate $1 billion in sales tax revenues to the Texas Water Fund. If HJR 7 is approved by Texas voters in November’s constitutional amendment election, then up to $20 billion will go toward water infrastructure projects over the next two decades. This amount may be leveraged with existing state bonding programs, potentially expanding the capacity of this funding stream to pay for a greater amount of projects.

The third bill of the Legislature’s water funding package, HB 500, appropriates over $2.5 billion toward water infrastructure. This historic down payment — the largest in legislative history — will immediately catalyze needed water projects.

The Road Ahead

Beyond the dedicated funding stream, SB 7 expands Texas’ water infrastructure financial strategy to include a broader array of projects that could be funded through the new revenue source. Now, water reuse, wastewater, flood control, and even agricultural water conservation projects are eligible to receive funding through the revenue dedication. These changes smartly address the state’s growing need for different types of water projects to meet accelerating demands and changes.

SB 7 also introduces performance measures that begin tracking the state’s progress toward addressing water infrastructure challenges. Moving forward, taxpayers and policymakers will have access to data describing how funded projects are expanding water supplies or fixing failing systems.

While these performance measures will inform the public of its return on investment in water infrastructure, they rightly challenge state, regional and local water officials to make progress in developing and implementing projects and plans.

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